Interim Report

The Health Care Financing Administration (HCFA) and the Department of Defense (DoD) are testing the feasibility of making Medicare-covered health care services available to Medicare-eligible DoD beneficiaries in the TRICARE program at military treatment facilities (MTFs). This report evaluates the early implementation of TRICARE Senior Prime at six MTFs, financed by subvention (the transfer of funds from HCFA to DoD). It finds that enrollment rates in Senior Prime were faster than in many private health plans and beneficiaries were generally pleased with their care. However, sites are having difficulties caused by the complexity of payment methods and by uncertainty over whether they will ever see Senior Prime revenues--even if DoD obtains net payments from HCFA after each year's reconciliation. If a larger Senior Prime program becomes a permanent part of TRICARE, the following policy issues must be addressed: (1) balancing interactions between the readiness mission and Senior Prime; (2) structuring and managing Senior Prime effectively; (3) creating the desired financial incentives; and (4) achieving effective clinical and cost performance. Lessons learned include the importance of effective introduction of the program and orientation of beneficiaries; early identification of enrollees with existing treatment requirements; the importance of coordination of intake activities and follow-up visits; and the difficulty many beneficiaries have with automated appointment and customer service systems. In addition, DoD's health data system capabilities will need to be improved.